Kristian Stout Quoted in The US Sun on How Franchise Laws Inflate Car Prices
State franchise-dealership laws continue to shape how cars are sold across the United States despite major changes in the auto market. A recent The US Sun article highlights findings from the ICLE by Kristian Stout and Subi Ramakrishnan on how these rules restrict direct-to-consumer sales and inflate prices. Read the full article here.
Assuming the current average price of $50,000 for a new car in America, it’s estimated that these franchise laws add $3,394 to $4,992 to the price per the International Center for Law & Economics.
Called a “middleman tax” by the ICLE, this cost can be broken down and attributed to several factors which would be wholly eliminated by direct-to-consumer sales.
Building on earlier studies by Goldman Sachs and the United States Department of Justice, the ICLE’s latest findings could finally bring change to this outdated model.